Lloyd’s of London has reported a £1 billion loss for 2018 after a series of natural disasters including major hurricanes in the USA, Typhoon Jebi in Japan, and the deadly California wildfires.
In a press release, Lloyd’s of London said, “Following a volatile investment environment and another costly year for natural catastrophes in which the market paid £19.7bn in claims (gross of reinsurance), Lloyd’s has today reported an aggregated market loss of £1.0bn for 2018 (2017: loss of £2.0bn).”
Lloyd’s said that natural catastrophes, including hurricanes Florence ( https://floodlist.com/america/usa/north-carolina-floods-hurricane-florence-september-2018 ) and Michael ( https://floodlist.com/america/usa/hurricane-michael-storm-surge-causes-floods-florida-october-2018) in the USA, Typhoon Jebi in Japan ( https://floodlist.com/asia/japan-kansai-airport-floods-typhoon-jebi-september-2018 ), as well as the Californian wildfires led to major claims costing the Lloyd’s market £2.9bn, significantly higher than the long-term average (£1.9bn), which contributed to a combined ratio of 104.5% in 2018.
Despite these substantial claims, Lloyd’s strengthened its financial position. Total assets grew by 9% to £118.0bn, and Lloyd’s net resources increased by 2% to £28.2bn. Meanwhile, Lloyd’s central assets also saw growth of 8% to £3.2bn. This financial security underpins every Lloyd’s policy and gives customers confidence in the market’s ability to provide financial support when it is needed most.
Against a backdrop of global uncertainty and challenging market conditions, Lloyd’s 2018 aggregated results showed green shoots of improvement. After several years of rate softening, the pricing environment saw strengthening by 3.2% on renewal business and the beginning of improvement in the attritional loss ratio which reduced 1.3% on the previous year.
Meanwhile, the Lloyd’s market continued to focus on driving improved performance. A rigorous business planning process for 2019 removed almost £3.0bn of poorly performing business from the market and remediation plans were implemented across all review classes of business. Four new syndicates started trading in 2018 demonstrating Lloyd’s enduring appeal and the market’s continuous focus on innovation.